Restaurants need more working capital

Many restaurants in Nova Scotia may not be able to reopen even when they're allowed to, according to a new survey from Restaurants Canada.

The survey, released Thursday, shows that 70 per cent of restaurant operators fear their business won't have enough liquidity to pay vendors, rent and other expenses over the next three months.

There is relief from the Canada Emergency Commercial Rent Assistance (CECRA) program, but rent obligations continue to be a challenge for many. Restaurants Canada says restaurants will need more support to remain viable.

The survey shows that at least one in five independent restaurant operators are dealing with a landlord unwilling to provide rent relief, either through CECR or some other arrangement. And 14 per cent of independent restaurants have been unable to pay rent for April, while nearly 20 per cent can't pay rent for May, thought they don't have an agreement with their landlord to postpone those payments.

“The resiliency of our industry won't be enough to ensure Nova Scotia's 2,200 restaurants remain viable in the face of insufficient cash flow and insurmountable debt,” Luc Erjavec, Restaurants Canada vice president for Atlantic Canada said in a release. “The Government of

Nova Scotia has made commendable efforts to help restaurants survive to this point with the Small Business Impact Grant and other emergency measures. But as these mostly small and mediumsized businesses begin to gradually reopen their dining rooms, there will be a need for continued support.”

Before the start of the pandemic, Nova Scotia's foodservice industry was worth $2.1-billion, represented 4.6 per cent of the province's

GDP and was the province's second-largest private sector employer.

Restaurants Canada says if conditions don't improve, sales could be down by as much as $395-million for the second quarter of 2020 and the industry might not be able to recover the roughly 24,500 jobs that have been lost.

The group is asking for action that includes rent relief, help with cash flow and rising debt levels, and assistance with labour costs.

RYAN TAPLIN • THE CHRONICLE HERALD The normally busy Argyle Street is fairly quiet nowadays with bars and many restaurants closed as a result of COVID-19 restrictions.